Based on an article published in Fortune Magazine’s on 15th August 2011, Singapore was the eighth most indebted country in the world.
Fortune said that Singapore had debts of US$254 billion (S$307 billion), equivalent to 95% of its gross domestic product (GDP).
MOF has clarified that the Fortune Magazine’s article is misleading as it only looks at Singapore’s liabilities and not its assets.
MOF maintains that Singapore’s financial reserves are well in excess of its debt and that Singapore is a debt creditor and not a debtor.
Part of Singapore’s reserves, which includes not just its financial assets but also it’s state land and buildings, are managed by Temasek Holdings and GIC.
Drawing on the past reserves requires the approval of the President of Singapore, who serves as a “second key” in safeguarding our reserves. For example, the current President, S R Nathan, has approved the use of our past reserves to fund land reclamation (a few times since 2001) and land acquisition for SERS projects (27 times since 2002).
In 2008, the reserves were also drawn down for a resilience package to help Singaporeans tide through the global financial crisis.
S&P has recently re-affirmed on Singapore’s long-term AAA rating.